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What is Your House Worth?

Same house – different city: might answer the question “what is my house worth?” if it was located in a different Australian capital city? Well, wonder no more, because there’s an interactive that will tell you exactly that.

It’s brought to you by Budget Direct (the insurance people) and asks an intriguing hypothetical question: if you could magically transport your present house to a different city, would it be worth more, less or about the same?

Australia’s house prices have surged at a much higher rate than those of other OECD countries such as the US, Canada and virtually anywhere in Europe.

Using the app is easy. Let’s say you live within the greater Melbourne area. Click on Melbourne and then select whether you reside in a stand-alone house or in an apartment, townhouse or unit. You then input the current value of your dwelling. If you’re not sure, there are additional steps you can take to help work it out.

Let’s say you decide your house is worth $400,000. Based on that figure, a page pops up that calculates that your abode would be worth slightly more in Canberra ($406,557) and a lot more in Sydney ($578,361). However, if your house was in any other capital city, it would be worth less than its value in Melbourne, e.g. $336,066 in Darwin, $334,426 in Perth, $327,213 in Brisbane, $286,885 in Adelaide and not much more than half its current value in Hobart – just $236,066.

The interactive also provides some interesting information relating to your house price. In this case, it tells you how much your property’s value has grown over the past decade, which Aussie city has had the biggest surge in growth in the past 10 years (Sydney at 83%), and whether properties in your area have grown in value over ten years compared to the national average.

In the case of your $400,000 Melbourne home, the answer is yes – your property’s value jumped more than 25% more than the Aussie average. You can also click on a cool graph that shows the comparative value of your house over time (between 2006 and 2016).[i]

What does all this mean for home owners? It means what we’ve always known – that house prices in Australia are subject to large geographical variations, and Sydney and Melbourne are leading the way in either high-value homes or overpriced homes – depending on how you look at it. In an increasingly crowded Australia, housing comes down to supply and demand. There are a lot more people wanting homes in a nice suburb of Sydney than there are folks rushing to buy a place in Hobart, so sellers can charge more for less.

The Rental Generation

One of the major changes in the Australian housing market in recent times has been the rise of renting, perhaps as an inevitable consequence of new homes becoming more and more out of reach for financially-strapped young Australians.

Twice as many of us are renting today compared to 1981, with rentals now making up around a quarter of all this country’s households – and this trend is expected to continue.

Twice as many of us are renting today compared to 1981, with rentals now making up around a quarter of all this country’s households – and this trend is expected to continue.

Australia’s house prices have surged at a much higher rate than those of other OECD countries such as the US, Canada and virtually anywhere in Europe. What’s also cause for concern is the fact that for the first time since World War II, Australia’s population is starting to surpass the housing stock available. Put simply, it’s harder to find affordable houses in Australia today than it has been for decades.

This creates an uncomfortable Catch-22 situation for young Australians desperately hoping to get a foot in the door of the current housing market. On the one hand, they can scarcely afford what’s on offer today and feel they’re forever chasing perpetually rising prices.

On the other hand, they also fear that if they don’t press ahead and put a deposit down on something now, they’ll miss out completely, as they see the goal posts moving further and further away with each passing year.[ii]

The Rise and Rise of Housing Prices

Over the past decade, at least in the capital cities, housing prices have continued to increase. As of December 2016, average prices for houses and units in capital cities were as follows:

What’s clear from these figures is that if you’re looking to live as inexpensively as possible in Australia, you may want to think about looking outside of a capital city. A recent list of ‘The 10 Cheapest Places to Live in Australia’ based on housing prices, unemployment rate, population and access to vital services like education and healthcare, came up with the following locations: Shepparton, the Latrobe valley, Greater Taree, Mildura, Wodonga, Dubbo, Toowoomba, Tamworth, Ballarat and Wagga Wagga.[iv]

Key Takeaways

The Same House/Different City interactive by Budget Direct is a handy way to find out what your house would be worth if it was located in a different part of Australia

Australia’s capital cities are some of the most expensive places to own property – especially Sydney and Melbourne

The Same House/Different City app provides useful information about how your home’s value has changed over the past decade, compared to other areas

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